It’s only a matter of time before someone re-names Boeing Co.’s flagship 787 Dreamliner the “Nightmareliner,” so I might as well be first. After all, the troubled aircraft has gone by variants of that epithet for years now, practically since work began on the megaproject more than a decade ago.

The repeated delays and technical problems with the Dreamliner are a lesson in how not to manage a megaproject. And the tutor is none other than the same Boeing whose genius and persistence with the 747 revolutionized air travel more than 40 years ago, bringing previously exotic flights from Montreal to Rome within reach of middle-class travelers for the first time. How does such a justly celebrated enterprise get something as big as its Dreamliner so wrong?

Just over two weeks ago, aviation authorities worldwide grounded all 50 Dreamliners in commercial service. The regulators were prompted to do so by two frightening incidents in which the Dreamliner’s novel lithium-ion batteries developed problems. The battery on a Japan Airlines Co. Ltd. (JAL) Dreamliner parked at Boston’s Logan Airport burst into flames January 7. Nine days later, pilots of an All Nippon Airways Co. Ltd. (ANA) Dreamliner were forced to make an emergency landing at Takamatsu after they smelled smoke in the cockpit. It was emanating from the plane’s lithium battery, which was over-heating.

Chicago’s Boeing and Airbus S.A., based in Toulouse, France, may enjoy a duopoly in large commercial aircraft, with Canada’s Bombardier Inc. and Brazil’s Embraer S.A. having a similar corner on the market for smaller commuter jets.

But Boeing and Airbus are archrivals, nonetheless, with no lack of trans-Atlantic trash-talking in the past 15 years or so. Airbus first humbled Boeing by overtaking it in total aircraft production. Boeing hastily sought to get its game back by beating Airbus with the world’s next state-of-the-art commercial airliner. As it happened, Airbus triumphed there too. It got its own megaproject, the world’s first double-decker “superjumbo,” the A380, into commercial service in 2007. Several years would pass before ANA debuted the Dreamliner in commercial flight.

No less than the A380, the 787 Dreamliner is a potential game-changer. Made of carbon-fibre composites rather than heavier aluminum, its lighter weight enables airlines to save a whopping 20 per cent on fuel, the price volatility of which is every airline’s biggest headache. No wonder Boeing has orders for an additional 800 Dreamliners, whose lower operating costs per passenger are a boon especially for operators of long-range routes like ANA and JAL.

If increasingly congested airports and an overzealous U.S. Transportation Safety Authority (TSA) are conspiring to make air travel miserable, the Dreamliner’s creative design is at least some compensation. The plane offers a cabin with higher ceilings and larger windows. And greater reliability was supposedly assured by having the brakes, cabin pressurization and air conditioning run by electricity from lithium batteries rather than the more glitch-prone hydraulics of old.

The current probes into the Dreamliner’s safety are focused on those batteries, which are supplied by Kyoto-based CGS Yuasa Corp. Regulators have long worried about lithium batteries. Lithium batteries generate more power in a smaller box. That is a further reduction in weight that fit Boeing’s strategy of designing the lightest plane with the largest payload, or capacity, ever designed. That’s how lithium batteries found their way into, among many household items, laptop computers which scorched the tops of users’ legs until the source of the over-heating problem was identified.

The downside of lithium batteries is that they’re unstable compared with the traditional nickel-cadmium batteries found in most large aircraft. If improperly charged or discharged, they can overheat and catch fire. The phenomenon is known as “thermal runaway.” That’s what happened in the ANA emergency landing. In the first 15 minutes of that flight, the Dreamliner’s battery suddenly went from a 100 per cent charge to below 30 per cent. ANA and regulators are still trying to figure out why that happened.

Charging and recharging lithium batteries is so tricky that Cessna Aircraft Co., the private plane maker, soon ended an experiment with lithium batteries and reverted to nickel cadmium after ground crews too often were unable to recharge the batteries properly.

Lithium batteries are an under-tested innovation, much like pipelines carrying corrosive heavy oil. The U.S. Federal Aviation Administration (FAA) ultimately green-lighted Boeing’s lithium-ion experiment. The proviso, readily met by Boeing, was that the battery would be integrated into an elaborate system of protections against overheating.

But proper charging of the Dreamliner’s lithium battery depends on acute competence of ground crews at airports worldwide. The same applies to frequently over-charged Tasers, another under-tested innovation when put into service. Their proper use depends on the acuity of thousands of cop shops that are supposed to monitor a Taser’s charge level every day.

A defiant Boeing CEO Jim McNerney said last week that “Nothing we have learned [from Boeing’s own internal probe] has told us that we have made the wrong choice on the battery technology. We feel good about the battery technology and its fit for the airplane.”

McNerney takes chutzpah to high altitude. There are only 50 Dreamliners in service. And there have been about 20 incidents of ANA and JAL replacing faulty batteries in 2012 and the two recent incidents that caused Boeing’s flagship aircraft to be grounded. If McNerney doesn’t know that an alarming number of his Dreamliners have been impaired by faulty batteries, Boeing’s board should be reviewing the suitability of his continued stewardship.

Misplaced urgency drove Boeing to rely to an unprecedented degree on outsourcing. A mere 40 per cent of the Dreamliner is built by Boeing. The idea was to fast-track the Dreamliner’s development. The execution, however, was abysmal. Boeing’s alienated engineers lost control over the plane, making delays routine as Boeing co-ordinated awkwardly with 50 major sub-contractors. As James Surowiecki, The New Yorker’s business analyst, sadly puts it: “The Dreamliner was supposed to become famous for its revolutionary design. Instead, it’s become an object lesson in how not to build an airplane.”

The Dreamliner lesson goes beyond the fate of Boeing. For enterprises providing an essential public good – in this case, aircraft as an underpinning of a globalized economy, and a Dreamliner that could reduce greenhouse gas emissions and consumption of finite fuel – the social stakes in Boeing’s error-prone strategizing are high. I can’t help thinking that if Boeing was state enterprise, with the more exacting scrutiny to which government is subjected, it would have been forced to make a course correction, through unrelenting critical publicity, without which the Dreamliner may yet be driven from the skies for good.

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